LYCEUM OF THE PHILIPPINES, INC., petitioner, vs.

COURT OF APPEALS,

FACTS:

> Petitioner is an educational institution duly registered with the SEC since
Sept 1950. Before the case at bar, Petitioner commenced a proceeding against
Lyceum of Baguio with the SEC to require it to change its corporate name and
adopt a new one not similar or identical to the Petitioner.
> SEC granted noting that there it substantially identical because of the
dominant word “Lyceum”. It was also noted that the petitioner has registered
the corporation ahead of Lyceum Baguio thus ordering the latter to change its
name
> CA and SC affirmed the decision of the SEC
> Petitioner wrote to other schools using Lyceum and advice them to
discontinue such use which later petitioner filed similar complaint against other
schools and obtain a favorable decision from the hearing officer relying upon the
SEC ruling in the Lyceum Of Baguio Inc. Case.
> On appeal, SEC En banc reversed the decision and held that the word
Lyceum have not become so identified with the petitioner. Attaching of
geographical names to the word "Lyceum" served sufficiently to distinguish the
schools from one another
> Petitioner went on appeal to CA, which affirmed the SEC En Banc’s
decision. The Motion for Reconsideration of the petitioner was also denied.

ISSUES:

1. The Court of Appeals erred in holding that the Resolution of the Supreme
Court in G.R. No. L-46595 did not constitute stare decisis as to apply to this case and
in not holding that said Resolution bound subsequent determinations on the right to
exclusive use of the word Lyceum.

2. The Court of Appeals erred in holding that respondent Western Pangasinan

Lyceum, Inc. was incorporated earlier than petitioner.

3. The Court of Appeals erred in holding that the word Lyceum has not acquired
a secondary meaning in favor of petitioner.

4. The Court of Appeals erred in holding that Lyceum as a generic word cannot
be appropriated by the petitioner to the exclusion of others.

HELD:

Under the corporation code Section 18, no corporate name may be allowed by
the SEC if the proposed name is identical or deceptively or confusingly similar to that
of any existing corporation or to any other name already protected by law or is
patently deceptive, confusing or contrary to existing laws. The policy behind this
provision is to avoid fraud upon the public, which would have the occasion to deal
with the entity concerned, the evasion of legal obligations and duties, and the
reduction of difficulties of administration and supervision over corporations.
True enough, the corporate names of the parties carry the word “Lyceum” but
confusion and deception are precluded by the appending of geographic names.
Lyceum generally refers to a school or an institution of learning and it is natural to
use this word to designate an entity which is organized and operating as an
educational institution.
The corporate names of private respondents are not identical or deceptively or
confusingly similar to that of petitioner’s. Confusion and deception has been
precluded by the appending of geographic names to the word “Lyceum”.
Furthermore, the word “Lyceum” has become associated in time with schools and
other institutions providing public lectures, concerts, and public discussions. Thus, it
generally refers to a school or an institution of learning.
Petitioner claims that the word has acquired a secondary meaning in relation to
petitioner with the result that the word, although originally generic, has become
appropriable by petitioner to the exclusion of other institutions.

Doctrine of Secondary meaning is a word of phrase originally incapable of

exclusive appropriation, might nevertheless have been used so long and so
exclusively by one producer with reference to his article that, in trade and to that
branch of the purchasing public, the word or phrase has come to mean that the
article was his product.

The doctrine of secondary meaning is a principle used in trademark law but has
been extended to corporate names since the right to use a corporate name to the
exclusion of others is based upon the same principle, which underlies the right to use
a particular trademark or tradename. Under this doctrine, a word or phrase
originally incapable of exclusive appropriation with reference to an article in the
market, because geographical or otherwise descriptive might nevertheless have
been used for so long and so exclusively by one producer with reference to this
article that, in that trade and to that group of purchasing public, the word or phrase
has come to mean that the article was his produce. The doctrine cannot be made to
apply where the evidence didn't prove that the business has continued for so long a
time that it has become of consequence and acquired good will of considerable
value such that its articles and produce have acquired a well known reputation, and
confusion will result by the use of the disputed name.

Petitioner didn't present evidence, which provided that the word “Lyceum”
acquired secondary meaning. The petitioner failed to adduce evidence that it had
exclusive use of the word. Even if petitioner used the word for a long period of time,
it hadn’t acquired any secondary meaning in its favor because the appellant failed to
prove that it had been using the same word all by itself to the exclusion of others.
 Lyceum of the Philippines has not gained exclusive use of “Lyceum” by long
passage of time. The number alone of the private respondents suggests strongly that
the use of Lyceum has not been attended with the exclusivity essential for the
applicability of the doctrine. It may be noted that one of the respondents – Western
Pangasinan Lyceum used such term 17 years before the petitioner registered with
the SEC. Moreover, there may be other schools using the name but not registered
with the SEC because they have not adopted the corporate form of organization.

The Petition for Review is DENIED for lack of merit, and the Decision of the Court
of Appeals is AFFIRMED.
Ulep v The Legal Clinic 223 SCRA 378
Hyatt Elevators vs. Goldstar Elevators, Phils. (473 SCRA 705 [2005])
Corp Law Topic: Principal Place of Business

It is an established jurisprudence the rule that the residence of a corporation is the

place where its principal office is located, as stated in its Articles of Incorporation.

FACTS:
> Goldstar (Respondent) Elevator Philippines, Inc. is a domestic corporation
primarily engaged in the business of marketing, distributing, selling, importing,
installing, and maintaining elevators and escalators, with address at 6th Floor,
Jacinta II Building, 64 EDSA, Guadalupe, Makati City.

> On the other hand, (Petitioner) Hyatt Elevators and Escalators Company is a
domestic corporation similarly engaged in the business of selling, installing and
maintaining/servicing elevators, escalators and parking equipment, with address at
the 6th Floor, Dao I Condominium, Salcedo St., Legaspi Village, Makati, as stated in
its Articles of Incorporation.

> On February 23, 1999, HYATT filed a Complaint for unfair trade practices and
damages under Articles 19, 20 and 21 of the Civil Code of the Philippines against LG
Industrial Systems Co. Ltd. (LGISC) and LG International Corporation (LGIC).

> Alleging among others, that: in 1988, it was appointed by LGIC and LGISC as
the exclusive distributor of LG elevators and escalators in the Philippines under a
‘Distributorship Agreement’; x x x LGISC, in the latter part of 1996, made a proposal
to change the exclusive distributorship agency to that of a joint venture partnership;
while it looked forward to a healthy and fruitful negotiation for a joint venture,
however, the various meetings it had with LGISC and LGIC, through the latter’s
representatives, were conducted in utmost bad faith and with malevolent intentions;
in the middle of the negotiations, in order to put pressures upon it, LGISC and LGIC
terminated the Exclusive Distributorship Agreement; x x x [A]s a consequence,
[HYATT] suffered P120,000,000.00 as actual damages.

> March 17, 1999, LGISC and LGIC filed a Motion to Dismiss raising the following
grounds: (1) lack of jurisdiction over the persons of defendants, summons not having
been served on its resident agent; (2) improper venue; and (3) failure to state a
cause of action.

> The [trial] court denied the said motion.

> December 4, 2000, HYATT filed a motion for leave of court to amend the
complaint, alleging that subsequent to the filing of the complaint, it learned that
LGISC transferred all its organization, assets and goodwill, as a consequence of a
joint venture agreement with Otis Elevator Company of the USA, to LG Otis Elevator
Company (LG OTIS, for brevity). Thus, LGISC was to be substituted or changed to LG
OTIS, its successor-in-interest.
 > Likewise, the motion averred that x x x GOLDSTAR was being utilized by LG
OTIS and LGIC in perpetrating their unlawful and unjustified acts against HYATT.
Consequently, in order to afford complete relief, GOLDSTAR was to be additionally
impleaded as a party-defendant.

> Hence, in the Amended Complaint, HYATT impleaded x x x GOLDSTAR as a

party-defendant, and all references to LGISC were correspondingly replaced with LG
OTIS.

> On January 8, 2001, the [trial] court admitted the Amended Complaint.

> On April 12, 2002, x x x GOLDSTAR filed a Motion to Dismiss the amended
complaint, raising the following grounds: (1) the venue was improperly laid, as
neither HYATT nor defendants reside in Mandaluyong City, where the original case
was filed xxx

> In the Order dated May 27, 2002, which is the main subject of the
present petition, the [trial] court denied the motion to dismiss: the court resolves to
rule that the complaint sufficiently states a cause of action and that the venue is
properly laid.

> The appellate court held that the venue was clearly improper, because none of
the litigants "resided" in Mandaluyong City, where the case was filed. 

> According to the appellate court, since Makati was the principal place of
business of both respondent and petitioner, as stated in the latter’s Articles of
Incorporation, that place was controlling for purposes of determining the proper
venue. The fact that petitioner had abandoned its principal office in Makati years
prior to the filing of the original case did not affect the venue where personal actions
could be commenced and tried.

Issue:

Whether or not the “residence” of the corporation is the same one as stated in
the Articles of Incorporation.

Held:

Since both parties to this case are corporations, there is a need to clarify the
meaning of "residence." The law recognizes two types of persons: (1) natural and (2)
juridical. Corporations come under the latter in accordance with Article 44(3) of the
Civil Code.

Residence is the permanent home -- the place to which, whenever absent for
business or pleasure, one intends to return. Residence is vital when dealing with
venue.
 A corporation, however, has no residence in the same sense in which this term is
applied to a natural person. This is precisely the reason why the Court in Young Auto
Supply Company v. Court of Appeals ruled that "for practical purposes, a corporation
is in a metaphysical sense a resident of the place where its principal office is located
as stated in the articles of incorporation."

The residence of a corporation is the place where its principal office is

established.

It now becomes apparent that the residence or domicile of a juridical person is

fixed by "the law creating or recognizing" it. Under Section 14(3) of the Corporation
Code, the place where the principal office of the corporation is to be located is one
of the required contents of the articles of incorporation, which shall be filed with the
Securities and Exchange Commission (SEC).

In the present case, there is no question as to the residence of respondent.

What needs to be examined is that of petitioner. the latter’s principal place of
business is Makati, as indicated in its Articles of Incorporation. Since the principal
place of business of a corporation determines its residence or domicile, then the
place indicated in petitioner’s articles of incorporation becomes controlling in
determining the venue for this case.

Jurisprudence has, however, settled that the place where the principal office of a
corporation is located, as stated in the articles, indeed establishes its residence. This
ruling is important in determining the venue of an action by or against a corporation.

NTC v CA 311 SCRA 508

FACTS

In 1988, pursuant to Sec. 40 of the Public Service Act, the National

Telecommunications Commission (NTC) served on the Philippine Long Distance
Telephone Company (PLDT) the assessment notices and demands for supervision
and regulation fee and permit fees. PLDT challenged the assessments, arguing that
these were being made to raise revenues and not as mere reimbursements for
actual regulatory expenses, and that the assessments should only have been on the
basis of the par values of PLDT’s outstanding capital stock.

The NTC denied the protest. Subsequently, the CA modified the NTC's order and
ordered it to recompute its assessments and demands for payment from PLDT.

RULING

NTC and CA rulings set aside.

The law in point is clear and categorical: the fee in question is based on the capital
stock subscribed or paid, nothing less nothing more. As such, the SC ordered the NTC
to make a recomputation of the fee to be imposed on PLDT on the basis of the
latter’s capital stock subscribed or paid.

Since Congress has the power to exercise the State's inherent powers of police
power, eminent domain, and taxation, the distinction between police power and the
power to taxwould not be of any moment when Congress itself exercises the power.
All that is to be done would be to apply and enforce the law when sufficiently
definitive and not constitutionally infirm.